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31 May 2016

Start-Ups: Protection of IP in India gets easier and less expensive!

By: Nagaraj Mannikkeri
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There has never been a better time to be an entrepreneur in India than in the past three or four years. Thousands of start-ups are burgeoning, offering solutions that help improve different facets of life. It is perhaps natural for entrepreneurs to marshal their limited resources (both money and people) and focus on solution creation, business development and securing funding. But it is important for them to realize that in a hyper-competitive environment, others may come up with their own solution ideas and unless the first-mover acts quickly to protect its IP, the risk always exists that their innovation may be deliberately or unwittingly copied, thereby compromising the entire business.

 India’s start-up ecosystem is still relatively nascent. That is why the Government of India has launched the Start-Ups Intellectual Property Protection (SIPP) scheme to make it easy and affordable for start-ups to protect their Patents, Trademark and Designs. In the process, it is expected that start-ups will become more aware of their intellectual property rights, and also better empowered to protect them. The highlights of the SIPP scheme are given below; the notification can be viewed here.  

 The SIPP scheme aims to encourage, nurture and mentor start-ups working on innovative and emerging technologies by providing them with affordable high quality IP services and resources as well as advice and assistance to commercialize their innovations and protect the underlying IP. It is currently a pilot project that will run for a period of one year from the date of start-up India campaign i.e., 16th January 2016.

 What start-ups qualify for the SIPP scheme?

The main parameters considered for a start-up to qualify for the SIPP scheme are as listed below:

  • Any start-up certified by the start-up Certification Inter-Ministerial Board set up by Department of Industrial Policy and Promotion (DIPP) as having an “innovative business”.
  • Start-ups incorporated and registered in India for not more than 5 years from the date of registration and with annual turnover not exceeding INR 25 Crores (approximately US$3.8 Million) in any of the preceding financial years
  • Start-ups that aim at innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property.
  • The start-up should not have been formed by splitting or reconstruction of any pre-existing business.

 For effective implementation of the SIPP scheme, the Controller General of Patent, Trademark and Design (CGPDTM) has empaneled facilitators. The CGPDTM will, from time to time, monitor and regulate the conduct and functioning of these facilitators. Upon receiving any complaint from a start-up or information from any resources about professional misconduct by a facilitator, the CGPDTM has the authority to remove the facilitator from the panel.

 Eligibility criteria for Facilitators

  • Any Patent Agent registered with the CGPDTM;
  • Any Trademark Agent registered with the CGPDTM;
  • Any Advocate as defined under The Advocates Act, 1961 who is allowed to practice law as per rules of the Bar Council, and is actively involved in filing and disposal of Patents, Designs and Trademark matters;
  • Departments/ organizations and agencies like TIFAC, NRDC, BIRAC, DEITY, DSIR etc.

 The CGPDTM has defined the following roles and responsibilities for SIPP facilitators:

  • providing start-ups with general advisory on different intellectual property rights;
  • promoting India’s IPR regime to start-ups in other countries;
  • providing assistance in filing and disposal of IP matters;
  • drafting patent applications;
  • preparing and filing responses to examination reports or other queries, notices or letters from the Indian Patent Office;
  • appearing for hearings on behalf of the start-ups; and
  • contesting oppositions, if any, and the like.

 To ensure that the SIPP scheme is truly affordable to all qualified start-ups, the CGPDTM has also framed the fees payable to empaneled facilitators. These fees apply irrespective of the number of patent, trademark and design applications made on behalf of the qualifying start-up. The applicable fees may be periodically revised by the Department of Industrial Policy and Promotion (DIPP). The current fees are as shown below:

 

Stage of Payment

Patent

(In INR)

Trademark

(In INR)

Design

(In INR)

At the time of filing application

10,000

5,000

2,000

At the time of final disposal of the application

Without Opposition

10,000

2,000

2,000

With Opposition

15,000

5,000

4,000

 

Under the SIPP scheme, facilitators shall not collect any fees directly from a start-up; their fees will be paid by the Central Government through the office of the CGPDTM.

 It is to be noted that if an application is withdrawn or abandoned before its disposal, then the facilitator shall be paid fees only for filing of the application (and not for disposal of the application).

 The CGPDTM has specified that statutory fees for filing patent, design and trademark applications in India or abroad should be borne by the start-up itself. The CGPDTM has also clarified that the SIPP scheme does not transfer, either wholly or partially, ownership rights on the IPR created to either to the Government or to the facilitator. It is clear that the IP rights will reside only with the start-ups. The SIPP scheme does not in any way entitle the start-ups or the facilitator to grant the registration of the IPR. All applications shall be disposed off as per the relevant laws and rules.

 Conclusion

The SIPP scheme is a pioneer in this space. It provides start-ups with an opportunity to come forward and file more applications to protect their IPR. Given that the pilot scheme will end in this financial year, it is expected that there will be a significant increase in the number of applications filed for patent, trademark and design in the course of the next six months or so. However, whether the CGPDTM would be able to effectively handle and dispose off the extra load of applications under this scheme is a question, and the answer to which we will know only in hindsight.

 

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